USD/CAD to move downward to 1.22 by Q2 2022 – Barclays
USD/CAD has touched 1.2800 for the first time since late September. The pair is currently edging lower toward mid 1.2700s and economists at Barclays expect this trend to continue as the Bank of Canada (BoC) is set to outpace the Federal Reserve hiking rates.
BoC’s relative hawkishness bodes well for the CAD
"We expect the BoC to retain its hawkish stance and hike more in line with what the market is pricing, unlike the Fed. We expect the BoC to hike three times next year starting in Q2 22 whereas we expect the Fed to be relatively more patient and expect no hikes in 2022.”
“BoC’s relative hawkishness bodes well for the CAD, and we do not expect any challenge to market pricing from its upcoming framework review."
"We expect USD/CAD to continue to grind slowly lower reaching 1.22 by Q2 22.”
“On the downside, the loonie remains vulnerable to broader risk sentiment deterioration"
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FXStreet Insights Team
FXStreet
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